Finance Commission open to view alternate index for devolution to states: Chairman Arvind Panagariya

The Finance Commission is open to considering alternate index for devolution of funds to states with regard to natural calamities and state-specific issues, Chairman of the 16th Finance Commission Arvind Panagariya said here on Monday. The problems arising due to natural disasters were beginning to get more and more acute, he said and pointed out that the 15th Finance Commission has recommended partial devolution of funds.

"The Commission is very much open to looking at alternate ways of measuring disaster relief, provided we can do it across all the states. The index has to be transparent and acceptable," Panagariya told reporters after a long session with the Tamil Nadu government earlier in the day.

Apart from Tamil Nadu, states like Himachal Pradesh which the Finance Commission had consulted, put forth a similar view. "Let me look into it if any particular type of disaster is not included," the Chairman said.


Also, he said that gap between the richer and poorer states widened. Thirty - forty years ago, the gap was something of the order of 3:1. This has become close to 6:1 now. So, the devolution went to the poorer states.

With today's discussion with Tamil Nadu, the Commission has so far held consultation meetings with 12 states and will hold similar meetings with 16 more states in the next seven months.